French firm Keolis wins commuter rail contract

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A commuter rail train bound for Rockport pulled into the Montserrat station in Beverly on Friday.

By Martine Powers
Globe Staff
January 08, 2014

The Massachusetts Department of Transportation’s board of directors today unanimously voted to accept the T’s recommendation that Keolis, a French rail company, take over operation of the state’s commuter rail system, winning the state’s largest operating contract in history.

MBTA General Manager Beverly Scott recommended Keolis as the winning bidder, after the board listened to roughly two hours of public comments.

On Tuesday, state officials revealed the price tag for the contract: $2.68 billion over eight years, with the possibility for two two-year extensions that could bring the total price to $4.3 billion.

That would make the base deal, the largest operating contract in state history, about $335 million per year, higher than the $214 million a year initially paid to the current operator, Massachusetts Bay Commuter Railroad Co., when it was first awarded the contract a decade ago.

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Keolis had been the sole bidder to challenge MBCR for the new contract, and according Scott, Keolis underbid MBCR by 6 percent, and that MBCR’s profit margin was higher, which made up much of the difference between the two company’s proposals.

MBCR had complained that the T conducted parts of the procurement process unfairly, including being given a single sit-down meeting with T officials.

Jim O’Leary, head of MBCR, addressed the board during public comments, and described the last 10 years of running the commuter rail. “We never say no to requests from the MBTA,” O’Leary said.

“After all that, we had a sum total of a 45-minute interview,” he continued. “We can only conclude that our bid was never taken seriously.”

But Scott told the board that written conversations were conducted with each bidder, and that the MBTA responded to more than 1,000 questions from both.

Wednesday’s MassDOT meeting was conducted before a full house; the audience included Bernard Tabary, Keolis’ CEO of international operations, who flew from Paris for the meeting. About 30 people offered public comments to the board, including Steve Townsend, president of Keolis America, who told the board that Keolis is committed to maintaining collective bargaining agreements, and strongly values diversity.

Unions representing commuter rail workers spoke favorably of MBCR, saying they worried that switching contractors at the same time that new coaches are arriving could be disastrous. But Scott told the board that the new contractor is mandated to hire the current commuter rail workforce and keep existing labor agreements in place.

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